Sunday, April 23, 2017

The Prioritization Process

My reply to David Eil's reply...

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If Medium gives subscribers the option to spend their fees on the most relevant stories, and each month you spend on average $4 dollars on economics stories and $1 dollar on cat stories, then it would be reasonably to conclude that, in your little corner of the world, economics stories are more relevant than cat stories. If on average I spend $4 dollars on economics stories and $1 dollar on epiphyte stories, then it would be reasonably to conclude that, in my little corner of the world, economics stories are more relevant than epiphyte stories.

Thanks to our spending decisions, you and I would be far better informed about what’s more or less relevant in each other’s little corner of the world. Except, all the subscribers would be using their fees to signal which types of stories are more or less relevant in their little corners of the world. So we’d all be far better informed what’s more or less relevant in all our little corners of the world. Knowing the actual value of stories would help everybody make far better informed reading and writing decisions.

When everybody makes far better informed reading and writing decisions, then this will quickly and vastly improve the variety and quality of choices on the menu. The choices on the menu would be far more relevant to all our different realities. As a result, we’d all be as happy as a kid in a candy store.

Here’s Samuelson’s passage again…

But, and this is the point sensed by Wicksell but perhaps not fully appreciated by Lindahl, now it is in the selfish interest of each person to give false signals, to pretend to have less interest in a given collective consumption activity than he really has, etc. — Paul Samuelson, The Pure Theory of Public Expenditure

Yeah, this is about economics. But it is also about communication… and the problem with transmitting inaccurate information. It’s about the problem with fake news. If the amount of money that we spend on economics stories inaccurately communicates our demand for them, then of course the supply of economics stories will be suboptimal. For sure we’d prefer it if the supply of economics stories was optimal, therefore our communication should be accurate.

Just like with Medium, Netflix does not give subscribers the option to spend their fees on the most relevant content. Subscribers are not given the opportunity to substantially participate in the prioritization process. I don’t have the opportunity to use my fees to accurately communicate just how relevant economics shows are. As far as I know, there’s only one economics show on Netflix and it’s tragically terrible. Needless to say, I’m really not as happy as a kid in a candy store.

You can’t prevent everybody from substantially participating in the prioritization process and expect the supply of products to accurately reflect everybody’s priorities.

First we prioritize how we spend our limited money and then, and only then, will the supply of products accurately reflect our priorities.

I’m interested in knowing what your priorities are. You should be interested in knowing what my priorities are. We should all be interested in knowing what each other’s priorities are. We should all be interested in having the most accurate treasure maps.

Coercion And Consequences

Comments on: Finding Liberty Between Vulnerability and Coercion by Adam Gurri

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Xero: The products at the grocery store aren’t equally relevant to my reality. Fortunately, I get to pick and choose which products I spend my money on. I have the chance to use my money to let the store know which products are the most important to me. The store offers me, and everyone else, the opportunity to substantially participate in the prioritization process. In other words, the store is a market.

The products (shows/movies) on Netflix aren’t equally relevant to my reality. Unfortunately, I don’t get to pick and choose which products I spend my fees on. I don’t have the chance to use my money to let Netflix know which products are the most important to me. Netflix does not offer me, or anyone else, the opportunity to substantially participate in the prioritization process. Netflix is not a market.

Coercion can be defined as preventing people from substantially participating in the prioritization process. With this definition, the government really does not have a monopoly on coercion. Netflix also engages in coercion.

However, the fact of the matter is that hardly anybody wants Netflix to be a market. So the real issue isn’t “delicately balancing” anything. The real issue is figuring out the rules of coercion. When is it beneficial to disregard how relevant things are to people’s reality? When is it beneficial to prevent people from substantially participating in the prioritization process? When does coercion truly make the world a better place for everyone?

Gurri: Coercion is making someone do something against their consent. Netflix certainly does not coerce anyone.

Xero: Netflix certainly doesn’t force me to subscribe. But if I choose to subscribe… does this mean that I necessarily consent to Netflix spending my money on products made by Michael Moore?

The government doesn’t force me to stay in the US. I certainly have the freedom to move to Canada. If I choose to remain in the US and pay taxes…. does this mean that I necessarily consent to the government spending my money on the drug war? If the government asked me… “Hey guy, do you consent to having your tax dollars spent on the drug war?”… my answer would be… “F no!!!”

The government and Netflix don’t care how relevant their specific products are to my reality. But I don’t choose to exit from their services because the alternatives sure aren’t any better. Also, in the case of the government, exit certainly isn’t cheap or easy…

Yes, you can change citizenship, but it takes years of paperwork, many thousands of dollars, and requires a total uprooting of yourself and all your work/family/friend connections. It’s a herculean labor even for those for whom it goes smoothly, and the hard experiences of so many immigrants demonstrates how exercising that choice rarely generates a smooth passage thereafter. So we live caught between that rock and the hard place of living under a government that may have nothing to do with how we want to live or be governed. – Ada Palmer, The Dystopian Question and Minorities of One

Preventing people from substantially participating in the prioritization process has a serious consequence. The consequence is a big disparity between the world we live in and the world that we want to live in.

Gurri: When you give Netflix your money, your consent no longer enters into how they use it.

When you do not give the US your money, they fine you or send you to jail. That’s coercion. If you don’t pay Netflix, they just cancel your service. The parallel simply doesn’t hold.

Xero: When you do not give the US your money, they fine you or send you to jail… because you’re using goods (roads, defense, etc) that you aren’t paying for. You’d be punished for stealing. Same thing if you somehow used Netflix without paying for it. I don’t know if anybody has necessarily gone to jail for stealing cable but some people have certainly been caught and punished for doing so.

So the parallel does hold. And again, whether we’re talking about Netflix or the government, the actual and real issue is that the products are not equally relevant to your reality. Is it beneficial when the money that you earn is spent on products that aren’t at all relevant to your reality? Is it beneficial when you’re prevented from substantially participating in the prioritization process?

Whether we’re talking about Netflix or the government… ideally you should be as happy as a kid in a candy store. There should be a gazillion products that are extremely relevant to your reality. But this ideal won’t be realized if you can’t pick and choose which products you spend your money on.

Basically, it’s less than useless to talk about coercion without considering the tangible consequences of coercion. Just like it’s less than useless to talk about theft without considering the tangible consequences of theft.

Gurri: Well I agree with your conclusion, but as usual you took a highly eccentric path to get there, hahaha.

Saturday, April 15, 2017

Markets Are The Most Exciting Thing Ever!!!!!!!!!

Some discussion in: Netflix And Virtue Signalling

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The money wouldn't necessarily be given to the content producers anyway - it would go to the people who own the IP. Netflix can't change that. Even if it did and even if we assume people didn't just lazily dump the fee into the first thing they see because they get to access everything anyway, money spent wouldn't necessarily reflect demand. - Conscentia

It feels like you're focusing on the word "demand" rather than on the "money spent" part. For me it's significant and meaningful and important and useful to know how much money people are willing to spend on things. It's convenient to use the word "demand" to refer to the amount of money that people are willing to spend on things. But we can also use the letter "X" or the word "fhqwhgads" or "zeitgeist" or any other combination of letters you want. I'm less interested in the word than in the concept. So it would be great if you focused on the concept.

Spending money is a sacrifice. The more money that is spent, the bigger the sacrifice. Since spending money is a sacrifice... generally people don't randomly spend their money. They didn't exchange their limited time and effort for money just so that they can flush it down the toilet.

It's easy to prove this... all I have to do is ask for your money. Of course you're going to want to know why you should give me any money. So in order to persuade you to give me your money, I'd have to provide you with some information. You'd compare the information that I gave you with all the information that you have and then decide whether or not to give me money. If you decided not to give me any money, well, in theory I could endeavor to provide you with different and better information. And again you'd compare this new information with all your information in order to decide whether to give me money.

This process of persuasion involves lots of brainpower being used and lots of information being shared, considered and compared. So it's significant and meaningful and important to know how much money individuals and groups of individuals are willing to spend.

Distributing the fee to the content does not guarantee that more such content will be made. Fans of Star Trek TNG could regularly dump their whole fee into the show but it's not going to be renewed for another season regardless. The show has long been finished. Netflix isn't Patreon. The money doesn't go to fund content. As such there is no sense is spending the fee into order to voice demand, and I'd expect user behaviour to reflect this.  - Conscentia

I was disappointed that Person of Interest was canceled...

As CBS’s chairman, president, and CEO Leslie Moonves told The Hollywood Reporter recently, the company “broke even” on Person of Interest last year, but because Warner Bros., not CBS, profits from the show’s back end (DVD sales, foreign rights, streaming, syndication), it was literally not worth it to renew the show. - Kate Aurthur, “Person Of Interest” And The Mysteries Of Cancellation

It was canceled despite the fact that nobody knew how much money that I was willing to spend on the show. And I suppose this could potentially sound egocentric. So let me zoom out. It was canceled despite the fact that nobody knew how much money that any subscribers were willing to spend on the show. This fact makes me acutely feel like I'm living in the stone ages. Where I have to go around trying to convince people that fire and wheels are useful. I'm extremely grateful that I live in an era where I don't have to try and convince anybody that fire and wheels are useful... but I'm also extremely disappointed that I live in an era where I do have to try and convince everybody that it's useful to know how much money people are willing to spend on things.

Consider how much better off your life is because you live in an era where everybody knows that fire and wheels are useful. Now double or triple or quadruple that amount of betterness to try and appreciate how much better off your life would be if you lived in an era where everybody knows that it's essential to know how much money people are willing to spend on things.

Admittedly I have absolutely no idea how much money everybody would be willing to spend on Person of Interest... so of course I can't guarantee that, if ignorance (of willingness to pay) had been eliminated, the show would have been continued rather than canceled. But I can guarantee that the deciders, whoever they were, would have made a far more informed decision.

The world will be infinitely better off when everybody makes far more informed decisions.

No. That the one rich guy spent 6000 times more does not mean the demand is 6000 times greater. It just means he can afford to spend more. Even if he does want it more, so what? That one rich guy is still just one guy. - Conscentia

Let's imagine that people could choose where their taxes go. Some people want to go to war with Canada. The shape of the demand looks like this...




What would you say about the shape of the demand? I'd say that it's certainly tall enough... but it's way too skinny. Too few people are truly willing to pay for war with Canada. Sure, these few people are willing to pay a lot... but that really doesn't overrule the fact that there aren't nearly enough of them to justify this particular use of their tax dollars. So the DoD would use the money for other things besides invading Canada.

Using technical terms I'd say that the breadth of the demand is insufficient. The shape is too skinny. The fatter (wider) it is... the greater the justification for using those tax dollars to attack Canada.

In terms of the public sector, being concerned with the shape of the demand makes sense because the point of taxes really isn't to spend them on things that only a relatively few people are going to benefit from. We really don't want rich people to be able to spend their taxes on private golf courses or private yachts or private airports. We want everybody, rich or poor, to spend their taxes on things that lots of people are going to benefit from. Maybe like healthcare?




The shape isn't super tall... but it's pretty fat. There's definitely more than enough demand breadth to justify these tax dollars being spent on healthcare. Although perhaps it's not quite correct to compare something more general (healthcare) with something more specific (war with Canada). It would probably be more correct to compare war with Canada to cancer research. We can reasonably guess that the demand for the latter would be far broader than the demand for the former.

In any case, it certainly makes sense to consider the shape of the demand when we're talking about tax dollars. The thing is, we really weren't talking about tax dollars. We really weren't talking about the public sector. We were talking about donors to the Libertarian Party using their donations to signal the value of the potential convention themes. Yet, you definitely thought that the shape of demand was very relevant!

If the entire point of the public sector is to have a space where it's unacceptable for money to be spent on things that will only benefit a few people... then it's gotta be the case that the entire point of the private sector is to have a space where it is entirely acceptable for money to be spent on things that will only benefit a few people.

If one person alone wants to spend enough money to choose the theme for the Libertarian Party convention... then that's entirely acceptable. If one person alone wants to spend enough money to prevent Person of Interest from being canceled... then that's entirely awesome. If one person alone wanted to spend enough money to pay for the Statue of Liberty's pedestal... then that also would have been entirely awesome.

Willingness to pay reflects ability to pay, and as such is not a measure of demand. One cannot be willing to pay money one doesn't have, regardless of whether one wants something. - Conscentia

If somebody is completely broke then clearly we can't know how much money they'd be willing to spend on defense, healthcare, Person of Interest, the Statue of Liberty's pedestal, food, clothes, computers or anything else. Homeless people don't have much or any money... this is certainly true. But does this really mean that we can't know the demand for anything? Does it really mean that it's irrelevant how much money people are willing to spend on things? Markets should be entirely discarded and replaced with... voting? I'm sure that this is not what you're suggesting... yet you're bringing up ability to pay as if it would somehow only be relevant to donors to the Libertarian Party using their donations to signal the value of potential convention themes. Actually, the ability to pay (or the lack thereof) is relevant to all markets. So if you're arguing that it invalidates the spending info for one market... then your argument has to be applicable to all markets.

If we prevent people from using their money to help determine the value of things... then things will be incorrectly valued. When things are incorrectly valued, things will be incorrectly used. When things are incorrectly used, people will be worse off. Therefore, the degree and extent to which people are currently worse off... reflects the degree and extent to which we prevent people from using their money to help determine the value of things.

Right now you believe that the products at your grocery store are going to be correctly continued or discontinued because shoppers are allowed to use their money to help determine the value of the products.

Yet you also believe that the shows on Netflix are going to be correctly continued or canceled despite the fact that subscribers aren't allowed to use their money to help determine the value of the shows.

And of course you don't believe that Netflix can read the minds of its subscribers. Instead, you believe that subscribers already provide enough information for Netflix to make adequately informed decisions. But even Netflix acknowledges that ratings are less trustworthy than viewing habits. Except, how can viewing habits be more trustworthy than spending decisions? And it's not like Netflix can compare the two sets of information. It doesn't even see the point in having the information about spending. And there isn't a single subscriber who is interested in providing this information. Except for me. And one of my friends. I suppose there might be a few more people out there who would see the point of using their fees to inform Netflix. In any case we certainly aren't the rule.

The idea of using our money to inform each other sounds so simple and solid. We already do use our money to inform each other. We subscribe to Netflix. This informs everyone that we value Netflix's content more than we value the alternative uses of our money...

Netflix's content > alternative uses

We clearly and obviously empower Netflix to compete society's limited resources away from less valuable alternative uses. Yay!!!!!

There's one very basic premise here: we don't equally value Netflix and the alternatives. Except, this is just as true for Netflix's content! Nobody equally values Netflix's content.

If we could spend our fees on our favorite content, then this would inform Netflix that we value our favorite content more than we value the alternative uses of our fees...

favorite content > alternative content

We would clearly and obviously empower the producers of our favorite content to compete society's limited resources away from the producers of less valuable content. Yay!!!!!!!!! Yay?

People get excited about finding a $100 dollar bill on the sidewalk...and graduating... and getting engaged... and having a baby... and getting a promotion... and writing a bestseller... and winning the lottery. Yes, these things and many more are very reasonable justifications for excitement. But in the grand scheme of things.... all of these things are subordinate to empowering more beneficial producers to compete society's limited resources away from less beneficial producers. Therefore, nothing should excite us more than markets. We should be the most excited about markets because they facilitate the most excitement. If Netflix was a market... then we'd be able to use our fees to inform everyone how excited we are about our favorite shows. Netflix and other producers would be able to use this information to supply even more exciting shows. Yay!!!!!!!!!

Improving Each Other's Treasure Maps

Some discussion in: Netflix And Virtue Signalling

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UnAnon
: Don't confuse poor Xero with the concept of nuance.
XeroFuck Nuance
UnAnon: Going by how I've responded to your threads in the past, dear, do you think I'm interested enough to read thirteen pages?
...
UnAnon: I think the most offending bit about Xero's dozens upon dozens of threads is that he seems to honestly believe his forum posts are genuinely worth my money.
Xero: My threads are pretty worthless if this is your conclusion.

What I actually honestly believe is that our behavior improves when we actually know what things are worth. In this video a street vendor is selling original art by Banksy. Except, the vendor doesn't inform people that it's original art by Banksy. And the price of the artwork is far less than the market value.

Most people have no clue what the artwork is really worth. Their behavior reflects this. If most people did know what the artwork is truly worth, all the artwork would be quickly sold.

It's the closest thing you'll see to people walking past $100 dollars bills just sitting in the middle of the sidewalk.

Imagine the equivalent scenario with some hunters and gatherers. Of course they are hungry... yet they simply walk past plants that are loaded with perfectly ripe squash. They don't know the value of the squash so their behavior is detrimental. Ignorance in this case is not bliss. Their ignorance decreases their chances of survival. Each member of the tribe has a treasure map... .. but squash is not on any of them.

Fortunately for humanity, some individual did discover that squash is nutritious and delicious. How did others learn of the value of squash? How was everyone's detrimental ignorance eliminated? How did squash end up on everyone's treasure map? Everyone's treasure map was improved because squash was something that people were willing to trade for. If you see me trading my tool for some squash... then if you know the value of my tool... then you'll figure out that I believe that the squash is even more valuable than my tool...

tool < squash

Right now we don't know how much a thread is actually worth. As a result, we all consistently overlook valuable threads. We all regularly walk past $1 dollar bills and $5 dollar bills and $20 dollars bills and even $100 dollars bills that are just sitting in the middle of the sidewalk. Our treasure maps are very incomplete so we all fail to regularly obtain and gain and utilize valuable information and knowledge that's just sitting there. Our behavior is detrimental because we don't know what a thread is worth. Our detrimental ignorance isn't eliminated. This is simply because we fail to use our money to inform each other how beneficial a thread is. We fail to put valuable threads on each other's treasure maps.

We buy squash but we don't buy threads. Because... threads are abundant and free. Why spend money on something that you can have for free? You should do so... if it will improve the behavior of the members of your tribe. If a thread has some knowledge and information that you think the members of your tribe should have and use, then it's in your best interest to use your money to bring it to their attention.

I am a member of your tribe. Every member of this forum is a member of your tribe. Our tribe is called NationStates. Our tribe will truly and thoroughly thrive when each and every member behaves as beneficially as possible. Behaving as beneficially as possible depends on having and utilizing the most important knowledge. In order for each and every member to have and use the most important knowledge, we have to use our money to bring the most important knowledge to each other's attention. We have to use our money to improve each other's treasure maps.

In the upper left hand corner of my screen it says, "NationStates by Max Barry author of LEXICON". Have you read Lexicon? I sure haven't. The founder of our tribe wrote a book that I haven't read. I wonder how many members of our tribe have read it.

Obviously Barry successfully brought his book to my attention. And for sure I can figure out what it costs to buy his book. But even if it was free it doesn't necessarily mean that I'd take the time to read it. This is simply because I don't know what the book is truly worth. Cost and worth really aren't the same thing.

But let's say that you did take the time to read Barry's book and you did really enjoy it. If you created a thread that explained why members of our tribe should read our founder's book, and lots of members used their donations to bring your thread to my attention... then the more valuable your thread, the greater my motivation to would read Lexicon.

How many books are there anyways? How many articles are on the internet? How many videos are on Youtube? We really don't have the time to read and watch everything. It's a very important fact that our tribe, as a group, can read and watch far more than any single member of the tribe can. Our tribe, as a group, has far more eyeballs than any single member of the tribe. Our tribe, as a group, has far more ears than any single member of the tribe. Most importantly... our tribe, as a group, has far more brains than any single member of the tribe. In order to fully utilize our collective brain... we need to use our money to improve each other's treasure maps. When each and every member of our tribe has and uses the tribe's most valuable knowledge and information... then we'll be the smartest and most powerful and most influential tribe on the internet. We will win the internet. At least until other tribes figure out the "secret" to our success.

But if it's beneficial for each and every member of the NS tribe to use our money to improve each other's treasure maps... then imagine how beneficial it will be when each and every member of the human race uses their money to improve each other's treasure maps. Then we'll be the smartest and most powerful and most influential species in the universe. We will win the universe.

Wednesday, April 5, 2017

What’s the best way to order things?

Comment on: Democracy Strikes Back by Paul Crider

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The grocery store is a market. Shoppers use their money to signal the value of the products. The order (relative importance) of the products is determined by the Invisible Hand (IH).

The non-profit sector is a market. Donors use their money to signal the value of the non-profits. The order (relative importance) of the non-profits is determined by the IH.

The Cato Institute (CI) is in a market, but it it is not a market. Donors can’t use their money to signal the value of the CI’s products (papers). The order (relative importance) of the CI’s products is not determined by the IH. Instead, their order is determined by the Visible Hand (VH).

The Libertarian Party (LP) is in a market, but it was also partly a market. Donors were recently able to use their money to signal the value of the potential convention themes. Here are the top results…

$6,222 — I’m That Libertarian!
$5,200 — Building Bridges, Not Walls
$1,620 — Pro-Choice on Everything
$1,377 — Empowering the Individual
$395 — The Power of Principle

This order (relative importance) of the themes was determined by the IH.

The for-profit sector is a market. Shoppers use their money to signal the value of clothes, computers and cars. The order (relative importance) of these goods and many more is determined by the IH.

The public sector is not a market. People can’t use their taxes to signal the value of environmental protection or national defense or space colonization. The order (relative importance) of these public goods and many others is not determined by the IH. Instead, it’s determined by the VH.

Youtube is not a market. People can’t use their money to signal the value of videos. Instead, they can use their votes (cheap talk) to signal that they like or dislike videos. The order (relative importance) of videos is not determined by the IH. Instead, it’s determined by the Democratic Hand (DH).

So the most important question is… what’s the best way to order things… the DH, VH or IH?